Tekmar Group plc (AIM: TGP), the offshore energy engineering specialist, has reported its interim results for the six months ended 31 March 2025, outlining a period of subdued activity in line with expectations, but pointing to a strong second half and solid progress under its strategic plan, Project Aurora.

Revenue for the half-year came in at £12.3 million (HY24: £16.2 million), with a gross margin of 29% and an adjusted EBITDA loss of £0.7 million (HY24: £1.8 million profit). Order intake during the period totalled £10 million, down from £21.1 million in the prior year, with a blended gross margin of 32%.

Net debt improved to £1.8 million, compared to £3.6 million a year earlier, supported by disciplined cashflow management. The Group also reported receipt of £0.6 million in June 2025 as part of an agreed payment plan to reduce aged Chinese debt.

Despite slower-than-expected contract awards in the first half, Tekmar said it expects a significantly stronger second half performance and remains confident in the health of its £50 million-plus pipeline of opportunities scheduled for award later in the year.

Richard Turner, CEO of Tekmar Group, said the company had performed well operationally, citing strong QHSE results and on-time delivery performance.

“We have made solid progress on our strategic plan – strengthening the business and building the platform for sustained growth for 2026 and beyond – alongside maintaining tight control of cash and cost. However, we still have significant free capacity, and our results reflect this underutilisation,” he said.

Strategic Delivery and Organisational Restructure

Tekmar is now operating under a simplified structure focused on two core verticals:

• Asset Protection Technology – the traditional heart of Tekmar’s operations, encompassing polyurethane and concrete protection systems, engineering design, simulation and installation services.

• Offshore Energy Services – grouting and equipment rental activities, with the latter delivering margins in excess of 90% in HY25.

Both areas are aligned to Project Aurora’s vision of organic growth supported by selective M&A. Cost reduction initiatives have delivered over £1 million in annualised savings, cutting overheads by 11% and creating a leaner base ahead of FY26.

The Group also renewed its £4 million trade loan facility with Barclays and secured a new £2 million Growth Guarantee Scheme loan backed by the British Business Bank. These will support working capital needs and the planned repayment of the £3 million CBILs loan in October 2025.

Commercial Activity and Contract Wins

Several notable contracts were secured during the period, including:

• A £5 million UK offshore wind contract

• Grouting services for the Inch Cape Offshore Wind Farm

• A three-year global engineering framework with Nexans S.A.

These projects demonstrate Tekmar’s ability to deliver high-value, integrated services across the offshore energy lifecycle.

Warranty Matters Progressing Towards Resolution

Tekmar reported significant headway on closing legacy warranty matters. In March 2025, a commercial settlement was reached with one customer, fully covered by the Group’s insurance proceeds with no cash impact. Further negotiations continue, and Tekmar reiterated its position that its products were not at fault in the industry-wide abrasion issue.

Order Book and Market Outlook

While order intake for the half-year fell short of expectations, the Group emphasised the strength of its visible pipeline – over £400 million in addressable opportunities – and highlighted an encouraging industry backdrop.

The offshore wind sector has returned to growth following a challenging 2022, with 19.4GW of Final Investment Decisions reached across 2023 and 2024. Turbine installations are forecast to double by 2030, and both OEMs and cable manufacturers are reporting improved performance and stronger backlogs.

Tekmar expects to benefit from increasing CAPEX and OPEX across offshore wind, oil and gas and marine civils – especially as supply chains tighten.

Outlook for FY25 and Beyond

The Group confirmed that, subject to expected order conversions, it anticipates adjusted EBITDA for the full year to be broadly consistent with FY24. The business continues to pursue accretive M&A opportunities to enhance scale and diversification.

Turner added: “Our priorities for the second half are to drive the business to meet our financial commitments for FY25 and win good quality orders that lead to a strong starting backlog for FY26. We continue to engage with potential acquisition targets and will remain disciplined in our approach.”